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Rebuilding Detroit: Exceleras Supports Homebuyer Workshop

By Rick Grant

By the height of the foreclosure crisis, banks had so many loans moving through the default process that one in 248 American households had received a foreclosure notice. It was a crisis the likes of which this country has not seen since the Great Depression. Since consumers in the housing market at the time were not alive to see the previous event, this was the most painful economic crash in their experience. It impacted consumers nationwide, but some of our biggest cities were hardest hit.

Now, 10 years after the crash and a mere five since the height of the foreclosure crisis, communities are struggling to rebuild, with vast swaths of their real estate blighted and hundreds of homes still boarded up.

Baltimore, Chicago, Las Vegas, Memphis, Milwaukee, Tampa, Toledo, and Virginia Beach are all struggling with blighted areas filled with REO or abandoned homes. But Detroit may be the best example of the massive negative impact of the foreclosure crisis.

Crisis in America’s Heartland

Today, over 50% of Detroit residents are renting, the first time in 50 years. The city saw ownership of 130,000 single family houses transfer from owners to landlords, according to Goss-Foster. Many of those renting are surviving below the poverty line and cannot afford to make repairs to the homes they rent.

The city is suffering, having lost over $300 million in tax payments, and ordered the demolition of 13,000 other homes at a projected cost of $195 million in 2015. Some of the foreclosed homes were resold for a few dollars, never inhabited, seized for non-payment of taxes and are now owned by the Detroit Land Bank Authority, a public authority that hopes to return Detroit’s vacant, abandoned, and foreclosed property to productive use. Between mortgage and tax foreclosures, more than one-third of city properties have been foreclosed since 2005.

The Industry Offers Support

Last month, National Faith Homebuyers (NFH), a community-based organization that assists minorities with homeownership and offers them informational resources as well as financial assistance and help to avoid foreclosures, held a special event at the Charles H. Wright Museum in Detroit. The event was targeted at first time buyers and current homeowners in need of a refinance. Fannie Mae and a number of its partners and seller/servicers was on hand.

The event provided a forum that allowed consumers to visit with housing experts, potential buyers or current lenders and provided educational resources to help explain credit scores, down payment assistance, and the refinancing process.

Doring Lloyd, Vice President of Business Development for Glencoe, IL-based Exceleras was in Detroit. “It was a great event. Everyone was there to help Detroit residents learn how to qualify for a new home loan to replace the home they lost in the crash or to refinance a home they were able to hold on to. This was a social event as much as a business one and it felt great being part of an initiative that is really helping other people.”

Fannie Mae was joined by lenders including Carrington, Flagstar, Alterra and more. Exceleras partner M2 Asset Services, LLC, was on hand as well. Last year, Exceleras partnered with M2 and made its DispoSolutions Platform an integral part of a new program that the partners said would change everything for these communities.

A combined services and technology offering, the new partnership is giving nonprofit community organizations nationwide a complete default and asset management solution that will allow nonprofits to manage real estate, giving them the power to acquire, rehabilitate and sell real estate in order to rebuild their communities. Detroit is one of the first communities to gain access to the new offering.

When the new partnership was announced, M2 Managing Partner Donald Maxwell, an industry veteran and former Director of Fannie Mae’s National Property Disposition Center, said: “From our perspective, this is a great opportunity for individual real estate investors to participate in the rebuilding of our communities, and earn a good return while doing it. This new approach accomplishes two things. First, it allows nonprofits to make more money with their services by having scale and access to the funding required to acquire these properties from sellers, like so many cities that currently own them. Secondly, it puts more people who deserve to be homeowners into homes of their own.”

Michael Harris, President and CEO of Exceleras, agreed: “We are thrilled that our friends at M2 had the foresight to make our technology the hub for a program that will have such a beneficial impact on communities all across the country. The efficiencies and cost savings we can provide for community-based organizations through this program will give them the power to work with investors and service providers to buy and sell real estate and heal neighborhoods.”

Lloyd said the people she met in Detroit were ready for a solution that would help them rebuild and the industry was on hand to support the effort. “Events like this give residents of these cities the opportunity to get back into a home they can afford utilizing programs that are out there for this purpose.”